Deal to avert fiscal cliff appears within reach

Updated at 9:46 p.m. — An agreement in principle to avert broad tax increases and spending cuts appeared imminent Monday night.

A senior Democratic source told NBC News that an accord had been reached. A senior GOP source said it “looks good” and that the outcome in the Senate would be clearer after Vice President Joe Biden conferred with Senate Democrats. Biden arrived at the Capitol to meet with Democratic senators Monday night.

Although a Senate vote later Monday night was possible, it’s not clear how an accord would fare in the House.

The interim New Year’s Eve tax deal negotiated by Biden and Senate Republican Leader Sen. Mitch McConnell of Kentucky would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000.

MSNBC’s Milissa Rehberger talks with contributor Ezra Klein and outlines the potential Senate deal that avert the Fiscal Cliff.

As of mid-afternoon Monday, the sticking point involved the “sequester,” the cuts to spending – about $100 billion to start in 2013 — that were mandated by the Budget Control Act which President Barack Obama signed into law last year. Republicans have signaled they might let the sequester take effect unless it was offset by other spending cuts; the GOP has also said it might accept a delay, but only for a few months.

The Obama administration, however, is pushing for a longer delay in implementing the sequester. Otherwise, the president said, replacing those automatic cuts must be “balanced” — shorthand for a combination of new taxes and other spending cuts.

Obama tried to push talks over the finish line earlier in the afternoon with a statement from the White House.

“Today, it appears that an agreement to prevent this New Year’s tax hike is within sight,” the president said at the White House. “But it’s not done.”

In the absence of a broader agreement to resolve the sequester, McConnell appeared in the Senate floor to request a vote only on the tax element of the fiscal cliff.

“Let’s pass the tax relief portion now,” he said. “Let’s take what’s been agreed to and keep moving.”

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